Friday 07/06/19

  1. In RETAIL NEWS, UK retail jobs fall, Monsoon delays its CVA but Joules and Loungers buck the gloom while Auto Trader cruises in the fast lane
  2. In TECH NEWS, Amazon drones on and Google Stadia gets a sceptical reception
  3. In INDIVIDUAL COMPANY NEWS, Beyond Meat targets break-even this year while Ford’s Bridgend closure could trigger more losses and Neil Woodford’s horror show continues
  4. In OTHER NEWS, I bring you some unusual sushi and an incredible drawing. For more details, read on…



So the number of retail jobs falls, Monsoon delays its CVA but on the positive side, Joules and Loungers stay strong and Auto Trader motors ahead…

Retail jobs fall shows pressure on high street (The Times, Gurpreet Narwan) cites the latest figures from the Office for National Statistics and Ordnance Survey which show that the number of people employed in high street retail jobs has dropped in every region apart from London in the last five years. The sharpest falls were in Wales (-10%), Scotland (-8.6%) and Yorkshire and the Humber (-7%) with London standing out at +6%. Retailer collapses and the increased use of self-service tills have had an effect as has the ongoing migration of shoppers going online. On the other hand, accommodation and food are doing better. * SO WHAT? * I guess this just confirms what we already knew. Our high street continues to be in a state of flux as it is currently undergoing an identity change that will continue for years to come.

Following on from what I said yesterday about Arcadia, Monsoon delays CVA procedure after Philip Green’s for Arcadia fails (The Guardian, Sarah Butler) shows that the owner of Monsoon and Accessorize has decided to delay restructuring plans after Arcadia’s plans hit some speed bumps with creditors. The company has said in the past that it would wait to see what happened with Arcadia before making a final decision on a course of action although it has to be said that Monsoon is not as reliant on landlords as Arcadia is. * SO WHAT? * Peter Simon, the owner and founder of Monsoon, has offered a £34m cash injection to keep the business afloat, so it’ll be interesting to see what happens IF Arcadia fails to convince its creditors in the vote next week. Comparisons are being drawn between Green and Simon given that they’ve both paid fat dividends to themselves over the years only for their companies to hit the skids at a tough time for retail.

On a positive note, Joules bucks high street gloom with ‘total shopping’ mantra (Daily Telegraph, Ashley Armstrong) shows a continuation of the company’s positive performance as it announced a 17% rise in sales for the year to May 26th, with pre-tax profits coming in at the top end of market expectations. The company doesn’t follow fashion trends, instead relying on family-friendly casual clothing and a loyal customer base of women aged between 25 and 44. It also has fewer shops than many of its peers. * SO WHAT? * This sounds great – and is especially impressive given the economic backdrop. Domestic seems to be going well and it caters to a proper audience that has money to spend. However, I often get the feeling that the wheels can fall off clothing retailers when they venture abroad. Joules is doing well in its current international expansion, but I really hope that it continues to keep its eye on the ball and doesn’t overreach itself – which is what often happens, where retailers end up having to beat a retreat back to Blighty with their tail between their legs a few years down the line.

Loungers is not resting on its laurels (The Times, Dominic Walsh) highlights another “winner” on the high street as it reported like-for-like sales growth of 6.9% for the year to April 21st. It opened 25 new sites over the last 12 months – 22 Lounges and three Cosy Clubs – to take the grand total of outlets to 146. Isn’t it great to hear about a restaurant/bar chain that’s doing well for a change??

Auto Trader steps up a gear with dealers (The Times, Robert Lea) shows that the online marketplace for cars put in a decent performance as retailers were keen to pay up to get more prominent listings. * SO WHAT? * This is particularly impressive given that sales of both new and used cars are getting weaker, so the company warned that “Predictions suggest that both markets will continue to decline for the calendar year 2019, albeit at a slower rate than in 2018. Economic and political uncertainty plus factors unique to the new car market , for example the continued impact of [new emissions regulations], continue to impact both new and used car sales”.



Amazon drones and Google’s Stadia gets a lukewarm reception…

You may be aware that Amazon just claimed that it will have drones making package deliveries to homes “within months” after displaying its wares in Las Vegas this week. However, although Amazon: drone zone (Financial Times, Lex) recognises that drone deliveries could cut costs dramatically (such deliveries are estimated to cost between 25-50% of road deliveries) it mentions practical limitations such as not being able to fly in areas with obstacles as well as noise pollution, privacy issues and general nuisance. Drone Major Group chief exec Robert Garbett remarked in Drone deliveries within months? Sure, and pigs might fly (Daily Telegraph, Matthew Field) that “Parcel delivery is a fabulous idea in certain forms but the public have a picture of a four-rotor drone taking a parcel to

your window. It is just so far from achievable in the short term it is unbelievable”. I, for one, am inclined to agree with him! And if drones can’t fly, I’m pretty darn sure that flying taxis will face even more problems!

In Google’s Stadia streaming service faces scepticism (Wall Street Journal, Sarah E. Needleman) we see that Google’s new cloud-based game-streaming service, that is expected to cost about $10 a month for a subscription when it launches in November, faced a lukewarm reception from analysts as there were no obvious blockbusters and a limited (only 30 titles) lineup. With cloud streaming, gamers can play games on an internet-connected device, avoiding the need for a console. * SO WHAT? * I think that this is a great idea in theory and when 5G kicks in properly along with a better games line-up this will explode in popularity. In the meantime, it will be a bit of a novelty although others, such as Microsoft and Electronic Arts, are working on similar offerings. I really think that the next generation of consoles will be the last. A “Netflix for games” is getting closer!



Beyond Meat aims for break-even, Ford’s woes in Bridgend could yet spread and Woodford ends a disastrous weak badly…

Beyond Meat aims for break-even 2019 (Wall Street Journal, Jacob Bunge) highlights Beyond Meat’s announcement that it could break even this year due to rolling out its plant-based products to more restaurants. In its first financial report since listing last month, the company said that its quarterly sales more than tripled although it is currently still loss-making. Beyond Meat’s Beyond Burger (which is delish, BTW) is sold in around 30,000 restaurants, food-service operations and supermarkets where it is sold alongside meat to tempt adventurous meat-eaters. * SO WHAT? * As I keep saying, I think meat alternatives will be MASSIVE. Beyond Meat and rival Impossible Foods’ success shows just what’s possible to the extent that now, even established food giants such as Tyson Foods, Brazil’s JBS and Switzerland’s Nestle are working on their own meat substitutes (Tyson Foods sold its 6.5% stake – or should I say “steak” – in Beyond Meat just before the flotation. I bet they wish they hadn’t given that the share price has quadrupled!).

Following up on other major stories that broke earlier this week, No-deal may put 6,000 more Ford jobs at risk (The Times, Robert Lea) puts the boot in to Ford workers as it

highlights the fact that more Brexit nightmares may be used as an excuse to sack 6,000 employees in Essex, east London and Merseyside if Ford decides to pull out of the UK completely. I think that there are many more other reasons to pull out, but Brexit could be a convenient excuse for Ford because they can blame the UK government – and not themselves – for having to evolve against a backdrop of rising costs and weaker sales. Brexit clearly won’t help, but it is not the only reason.

Woodford loses last remaining large client as assets shrink to £5bn (Financial Times, Owen Walker, Peter Smith and Caroline Binham) heralds an imminent coup de grace for former fund management star Neil Woodford as he lost yet another big client. He’s like Anthony Joshua swaying on his knees on the canvas while “fat cat investor” Andy Ruiz just lands punch after punch. God knows how he’s going to turn this around. Mind you, it might get worse for him as an individual as well as Hargreaves Lansdown’s head of research Mark Dampier in Supporter sold stock weeks before suspension (The Times, Ben Martin) as eyebrows have been raised by Dampier, by all accounts a mate of Woodford, because he sold his shares worth about £600,000 on May 16th for £23.92 a share – along with his wife who sold shares worth about £5m on the same day – only weeks before they crashed to what they are now – £19! Either Dampier is an absolute genius or something very fishy has been going on…At the moment, there are no suggestions of impropriety, but tongues will definitely be wagging!



And finally, in other news…

I thought I’d leave you today with the very clever Japanese office worker gets fired, retaliates by making sushi out of business suit and iPhone (SoraNews24, Oona McGee and the incredibly impressive This isn’t a Harry Potter photo – it’s an incredible coloured pencil portrait from a Japanese fan (SoraNews24, Shannon McNaught Have a great weekend!

Some of today’s market, commodity & currency moves (as at 0839hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq *DAX *CAC-40 *Nikkei **Shanghai **
7,260 (+0.55%)25,721 (+0.71%)2,843 (+0.61%)7,61611,953 (-0.23%)5,278 (-0.26%)20,895 (+0.61%)2,828 (-1.17%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

(markets with an * are at yesterday’s close, ** are at today’s close)